JPH - Year 7, Volume 6, Number 1, 2009

ITALIAN JOURNAL OF PUBLIC HEALTH

Health insurance system and provider payment reform in the Republic of

Macedonia
Doncho M. Donev

Institute of Social Medicine, Medical Faculty Ss Cyril and Methodius University in Skopje, Skopje, Republic
of Macedonia
Correspondence to: Doncho M. Donev, Institute of Social Medicine, Faculty of Medicine, 50 Divizia 6, 1000 Skopje, R. Macedonia. E-mail:
donevdoncho@gmail.com

Abstract

This article gives an insight to the current health insurance system in the Republic of Macedonia. Special
emphasis is given to the specificities and practice of both obligatory and voluntary health insurance, to the
scope of the insured persons and their benefits and obligations, the way of calculating and payment of the
contributions and the other sources of revenues for health insurance, user participation in health care
expenses, payment to the health care providers and some other aspects of realization of health insurance in
practice. According to the Health Insurance Law, which was adopted in March 2000, a person can become an
insured to the Health Insurance Fund on various modalities. More than 90% of the citizens are eligible to the
obligatory health insurance, which provides a broad scope of basic health care benefits. Till end of 2008
payroll contributions were equal to 9.2%, and from January 1st, 2009 are equal to 7.5% of gross earned wages
and almost 60% of health sector revenues are derived from them. Within the autonomy and scope of activities
of the Health Insurance Fund the structures of the revenues and expenditures are presented. Health financing
and reform of the payment to health care providers are of high importance within the ongoing health care
reform in Macedonia. It is expected that the newly introduced methods of payments at the primary health care
level (capitation) and at the hospital sector (global budgeting, DRGs) will lead to increased equity, efficiency
and quality of health care in hospitals and overall system.

Key words: health insurance system, Republic of Macedonia (FYR), provider payment reform, capitation,
global budgeting, DRGs

Country Overview and the two neighbours’ relations have since

Macedonia is located in the Central Balkans,
bordering Bulgaria, Greece, Albania, Serbia and
Kosovo, covering an area of 25,713 km2.According to
the 2002 census, the country’s population was
2,022,547. Data on the declared ethnic affiliation from
the 2002 census reported that 64.1% of the
population identify themselves as Macedonians,
25.17% as Albanians, 3.95% as Turks, 2.66% as Roma,
1.78% as Serbs, 0.84% as Bosniacs,,0.48% as Vlachs and
1.04% others. The country seceded peacefully from
Yugoslavia after an independence referendum, held in
September 1991. The Constitutional name of the
country is the Republic of Macedonia, but it was
recognized by the United Nations on April 8, 1993
under the provisional name of the Former Yugoslav
Republic of Macedonia. The country’s title and
heritage were the subject of a sharp disagreement
with Greece, whose Northern Province is also called
Macedonia. This dispute has not yet been fully
resolved although a trade embargo was lifted in 1995
improved considerably.
At the time of independence, Macedonia was
economically one of the least developed of the six
republics of the SFR Yugoslavia and in the years
immediately following independence, the economy
contracted even more. The economy is currently
recovering and GDP growth is positive. From an
international perspective, poverty in Macedonia is
moderate with 20-25% of the population living below
the official poverty line of US $75 per month or per
capita consumption or below the international
standard of US$2.15 per day. The population groups
identified as being most at risk of poverty are the
unemployed, socially imperilled households, retired
persons and farmers. Larger households in the rural
areas, particularly those with members who are
unemployed or have low educational levels, are
identified as specific risk groups together with the
unemployed in urban areas. United Nations
Development Programme reported that the

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unemployment rate in Macedonia was 32.1% of the
labour force in 2001, and 36% in 2006, placing
Macedonia in the rank of countries with an
extremely high unemployment rate in Europe. Basic
demographic and socioeconomic indicators, as well
as some health care system indicators for
Macedonia are presented in Box 1.
Poverty has a serious impact on the health status
of the population and accessibility to health
services. Certain illnesses associated with poor
living conditions remain typical for some vulnerable
groups of the population. The data on the results
obtained from scientific research and the
epidemiological studies clearly indicate the
connection between the deteriorated social and
economic conditions and, especially
unemployment, the social and economic exclusion
and increased human insecurity and the
psychosocial stress, on one hand, and certain
indicators for deterioration of the health of the
population, on the other hand. Among the most
important indicators are the morbidity due to
cardiovascular diseases, malignant neoplasms and
other diseases, mental breakdowns and suicides,
growth of alcohol dependency, smoking and drug
addiction etc. The rates of general mortality of the
population in Macedonia in the period from 1992-
2007 showed constant growth and slight changes in

Country overview, health status of the population and health system indicators in Macedonia.

Box 1. Republic of Macedonia, demographic and socio-economic aspects, and health care system indicators, 2007.

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the prevalence of certain causes of death. Leading
causes of death are circulatory diseases and
malignant tissues, which jointly made up 75.7% of
all causes of death in 2007 as opposed to 2002
when they had made up 74.4% (Table 1).
Introduction
The current Health Insurance System (HIS) in
Macedonia was introduced by the Health Insurance
Law [1], which was adopted in March 2000, and
modified and supplemented by the amendments in
2000, 2001, 2003, 2005 and 2007. The Health
Insurance Law was enacted on April 7th, 2000,
replacing the articles of the 1991 Health Protection
Law related to the health insurance [2,3]. In fact, the
current HIS in Macedonia is somehow a
continuation of the previous one, with some
modifications. New elements are the way of
regulating relationships within the health insurance
concerning obligatory and voluntary insurance, the
scope of the insured persons and their benefits and
obligations, the way of calculating and payment of
the contributions and the other sources of revenues
for health insurance, new policy for user
participation in health care expenses, reform of
provider payment, as well as public accountability
measures and defining the scope of activities and
responsibilities of the Health Insurance Fund that
was established as an independent institution
outside of the Ministry of Health [4,5].
Two types of health insurance in Macedonia
There are two types of health insurance
according to the Law on Health Insurance [1]:
compulsory and voluntary insurance for some
forms of health care.
Compulsory health insurance was established for
all citizens of Macedonia in order to provide social
Table 1. Most common causes of death of the population in Macedonia in 2007 and 2002.
Source: Statistical Yearbook of the Republic of Macedonia, 2008 and 2003.
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and health security and to realize certain rights in
case of disease or injury and other benefits from
health care established by the Health Insurance Law.
Compulsory health insurance is based on the
principles of obligation and universal coverage,
solidarity, equality and effective usage of financial
resources in accordance with the Law. It means that,
each insured person can use health care services in
the event of illness and injury and health insurance
benefits (pecuniary compensations) in an unlimited
manner when necessary. On the other side, there is
an obligation to all employees and other bearers of
insurance for continuous payment of contributions
for health insurance. The contribution rate is the
same for all employees, regardless of the level of
salary or income, or the frequency and amount of
the health services used on the account of the
health insurance funds. The principles of solidarity
and equity are compulsory [6].
Some special risks and services, which are not
covered by the obligatory health insurance, should
be provided for by the employers of certain groups
of workers. It includes preventive and screening
measures and the use of health care in case of injury
at work and occupational diseases due to the
increased risk associated with the nature of their
work. It also applies to the insured professional
sport persons, drivers, pilots and aircraft crew etc.
Voluntary health insurance was introduced for
the health services that were not covered by the
obligatory health insurance. It covers use of some
specific health care services, as well as services and
degree of comfort at a higher than standard level as
offered by the obligatory health insurance, in
accordance with the agreements and norms set by
the agency/company that provide voluntary
insurance. Voluntary health insurance is an
additional insurance, allowed only for the insured

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within the obligatory health insurance. However,
due to the lack of interest shown by the citizens,
voluntary health insurance has not yet been
implemented in practice.
Modalities of becoming an insured through
compulsory health insurance
Health Insurance Law (1) promotes various
modalities for a person to become member of the
compulsory health insurance offered by the Health
Insurance Fund of Macedonia (HIFM). Almost all
citizens (about 95% of the total population) of
Macedonia are insured by the obligatory HIS, in
various modalities: (a) on the basis of their
employment - employed individuals (workers),
individuals working in the private sector, and
individuals performing agrarian activity (farmers);
(b) on the basis of their retirement rights -
retirement, disability and family pensions, as well as
pensions and disability rents from foreign insurance
bearers; and (c) on other grounds - unemployed
persons registered by the Employment Office,
beneficiaries of basic social care, war-disabled
persons (soldiers and civilians), family members of
the insured who serve in the Army of Macedonia,
persons who are in prison or sentenced to other
punitive measures, as well as persons in religious
communities (monks, nuns) etc.
Citizens who are not included in any of the above-
mentioned groups, can voluntarily obtain obligatory
health insurance for themselves and for their family
members by paying health insurance contributions
in accordance with the Law.
The compulsory health insurance, apart from
covering the active insuree (bearer of insurance),
also covers his/her close family members: spouse
and children up to the age of 18 or to the age of 26
respectively if they are students involved in regular
education. Compulsory health insurance is also valid
for foreign citizens and individuals without any
citizenship, if they are employed on the territory of
Macedonia, in domestic or foreign firms, in
international organizations or diplomatic
residencies, or if they are involved in an expert
training or education in Macedonia. Foreign citizens
from countries having international agreements
with Macedonia for social insurance, use health care
benefits according to those agreements.
The expenses of the health care services for the
citizens of Macedonia who do not undergo any
form of the compulsory health insurance, i.e., who
are not Fund insurees, are covered by the State
budget in the following cases: (a) health care of
children and adolescents up to the age of 18 and
pupils and students up to the age of 26; (b) health
care of women related to pregnancy and delivery;
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and (c) treatment of infectious diseases, mental
diseases, rheumatic fever with complications,
malignant diseases, diabetes, chronic dialysis,
progressive nervous and muscle diseases, cerebral
paralysis, multiple sclerosis, cystic fibrosis,
hemophilia, thalassemia and similar diseases,
epilepsy, alcoholism and drug addiction.
Benefits from the compulsory health insurance
The HIFM provides the right to health care as well
as the right to a sick-leave and other financial
reimbursements to the insured.
The compulsory health insurance, on the
principle of solidarity as a key element for providing
health care benefits, provides the insured with a
broad scope of basic health care benefits or "basic
package of health care services" at all health care
levels – primary, specialist-consultative and hospital
health care level:
I. Health care benefits at the Primary Health Care
(PHC) level: (a) medical examinations and other
kinds of medical assistance in order to determine
the diagnosis, follow-up or check the health status;
(b) undertaking expert medical measures, other
measures and procedures for promoting the health
condition, i.e. prevention and early detection of
diseases and other health disorders; (c) providing
emergency medical assistance; (d) outpatient
treatment or home care treatment at the
beneficiaries' home; (e) health protection related to
pregnancy and delivery; (f) implementation of
preventive, therapeutic and rehabilitation measures;
(g) prevention and treatment of oral and dental
diseases; (h) providing medicines in accordance to
the list of medicines, issued by the HIFM;
II. Health care benefits at the Specialist-
consultative Health Care level: (a) examination of
the health status of the insured and establishing
diagnosis and giving recommendation for further
treatment; (b) performing specialized diagnostic,
therapeutic and rehabilitation procedures; (c)
prosthetic, orthopedic, and other facilities,
supporting and sanitary instruments and dental
technical devices according to the General Act
issued by the HIFM; and
III. Hospital (in-patient short-term and long-term)
services: (a) examination of the health status,
providing treatment, rehabilitation and care,
accommodation (in standard conditions) and meals
during hospitalization; (b) providing medicines and
supporting materials in accordance to the List of
medicines, issued by the HIFM; (c) accommodation
and meals for the accompanying person of a child
up to 3 years of age during hospitalization up to 30
days if necessary.
Moreover, the funds collected from the statutory
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health insurance are used to cover the preventive
measures and activities, which are an important part
of the basic health care package. These include:
protection against harmful influences on
population health; detection, curbing, and
prevention of contagious diseases; systematic
check-ups of children and students; women’s
protection in relation to pregnancy, childbirth,
maternal leave, and family planning; protection of
newborn and small children; protection against
various types of addiction, and other preventive
measures and activities.
The HIFM provides basic health care services to
the insured persons through the health institutions
with which it has signed contracts.
Some areas and specific programs are financed
directly from the state budget, such as maternal and
child health care, family planning, HIV/AIDS, blood
donation, immunization and environmental health.
The following services are not covered by the
compulsory health insurance and might be a
subject to voluntary health insurance: (a) aesthetic
surgery, sanatorium treatment and medical
rehabilitation of certain chronic non-communicable
diseases (except for children up to 18 years of age);
(b) in-patient health services with higher standard
or comfort; (c) medicines not included in the List of
medicines determined by the HIFM; (d) orthopedic
facilities and instruments not included in the list
prepared by the HIFM or made of higher standard of
materials; (e) accommodation (lodging and food) in
gerontology facilities. The areas of care not in the
benefits package include also pregnancy
termination unless clinically indicated, issuance of
medical certificates and treatment for alcohol abuse.
Compulsory health insurance also provides some
other benefits to the active insured: (a)
reimbursement of salary due to temporary
incapacity to work due to illness or injury, medical
examination, voluntary donation of blood or
biological tissues, during sickness leave or during
temporary absence from work due to pregnancy,
childbirth and maternity leave for 9 months as well
as for the care of a sick child up to age of 3 years (no
limit) or other family members (up to 30 days); (b)
all of the insured have the right to reimbursement of
travel expenses related to the usage of health care
services, as well as some other reimbursements.
Realization of the rights to health care
The compulsory health insurance benefits are
used by the active insured persons and their family
members through HIFM on the basis of their
insurance record i.e. the health book and blue
tickets/marks, which is a payment record for their
health insurance contributions.
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The insured person has a right and obligation to
choose a physician (doctor of choice) within the
appropriate service at the PHC level. The doctor of
choice is responsible to follow the health status and
to provide preventive measures and activities for
health promotion and prevention and early
detection of diseases as well as treatment of diseases
and injuries, to determine the need for sick leave
and to provide referrals to higher levels within the
health care system, if necessary.
Basic health care benefits might be realized on all
levels of the health care system as follows: 1)
primary health care, including general practice,
occupational medicine, pediatrics, school medicine,
gynecology, and general dental practice; primary
health care also covers emergency medical
assistance and home treatment; 2) consultative-
specialist health care; 3) sub-specialist health care
provided at the clinics and institutes of the Medical
Faculty in Skopje and some other health institutions
at the national level; 4) hospital health care; and 5)
medical rehabilitation at outpatient services, health
homes/centers, and hospitals during the hospital
treatment as well as specialized medical
rehabilitation in specific rehabilitation centers.
An insured person has the right to treatment in a
foreign medical institution (hospital) if the disease
can not be treated in Macedonia and if there is a
possibility for successful treatment in the country to
which the insured person is referred.The conditions
and procedure for treatment abroad are regulated
precisely by the General Act of the HIFM. Physician
recommendation and the approval for treatment
abroad by the Fund Committee are required before
the insurance company (HIFM) can grant coverage
for that treatment. Coverage for services obtained
abroad that are available in Macedonia is not
provided for in order to protect Macedonian
medical care services against erosion.
Resources for health financing
Health care system services and certain broader
public health activities are financed by the monthly
payroll (profit) contributions of the employed
persons in the public and private sectors and by
contributions from the general budgetary revenues,
external assistance and limited imposition of user
fees. Most of the revenues (about 96%) are raised
from the obligatory health insurance contributions
and transfers in accordance with determined rates.
About 56.96% of domestic health sector revenues,
in the year 2007, were derived directly or indirectly
from individual’s payroll contributions to the HIFM,
with the rest, about 40.39%, from transfers from
other state agencies such as the Pension Fund and
Employment Institute, and 2.64% other non-taxable

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Table 2. Revenues of the Health Insurance Fund of the Republic of Macedonia in 2007 [8].
Source: Health Insurance Fund of the Republic of Macedonia (2008).
revenues (table 2). Till end of 2008 direct
contributions from public and private sector wage-
earners were equal to 9.2% of their monthly salaries
and from January 1st, 2009, the rate was reduced to
7.5% [7]. Direct payroll contributions to the HIFM
were withheld from the source (employer).
A certain percentage of the money from payroll
contributions to the Pension and Disability Fund
and the Employment Fund is transferred to the
HIFM for health insurance coverage of the
retired/pensioners, disabled and eligible
unemployed persons. For pension beneficiaries, the
contribution rate (14,694%) is applied to the net
pension payment, while for the unemployed and for
the recipients of social assistance the contribution
rate of 8.6% is applied to 65% of the average net
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salary in the country.These funds are transferred to
the HIFM by the Pension and Disability Fund, the
Employment Fund, and by the Ministry of Labor and
Social Policy (table 2). Farmers had to contribute
9.2% of the cadastre income till end of 2008 and
7.5% from January 1st, 2009 [7]. For the citizens with
a private enterprise and their employees, the rate
was 9.2% of the gross earned wages and
reimbursements till end of 2008 and 7.5% from
January 1st, 2009 [7]. Additional contributions for
health insurance in case of injuries incurred at work
and work-related diseases are set at a rate of 0.5% of
the gross earned wages and reimbursements.
The general budget was also a weak source of
revenue for the health sector until 1992, when
financing of the most Governmental prevention
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programs was shifted from HIFM to the budgetary
financing. The general budget accounted 5.9% of
domestic health revenues in 2002 and 5.2% in 2007,
which is remarkable increase comparing with 1996
when accounted about 3.5% [2,4,5,8].
There is an ambitious tendency of the
Government of Macedonia to increase the
budgetary financing in order to provide health
insurance for all uninsured persons and to achieve
universal health insurance coverage for all citizens
in Macedonia from June 1st, 2009 [9].
Revenues generated through user fees for health
services and applied devices in the public health
system amounted to 2,3% of domestic health
revenues in 2007 (table 2).
Co-payment
The active insured persons and their family
members have the obligation to co-pay, from their
personal funds, a predetermined percentage of the
cost of the health services provided, but not more
than 20% of the total cost of the health service or
drug (except for some hearing and visual (eye's)
facilities and prosthetic devices). In 2001, the HIFM
decided on the level of user's participation in the
health care expenses, as follows: (a) 10-20% of the
price of health services and of medicines at the PHC
level; (b) 10-20% of the price of health services for
treatment of oral and dental diseases (except
prosthetic devices); (c) 10-20% of the costs of
services in the specialist-consultative care and
hospital treatment, including all costs for services
and medicines; (d) 20% of the total expenses for
approved treatment abroad; (e) 20-50% of the price
of hearing and visual (eye's) facilities; (f) 20% of the
costs of dental prosthetic devices; and (g) 20-50% of
the price of some other prosthetic devices in
accordance with the General Act issued by the
HIFM.
Introducing co-payments for health care services
and drugs was one of the most controversial
policies employed in Macedonia after gaining
independence in 1991 [2]. The 2000 Health
Insurance Law continued this practice for co-
payments with fixed charging scales by introducing
a general principle of inversion of the level of user's
charge and the price of a service or drug. It means
that the co-payment rate/percentage is higher for
the lower price services, but not more than 20% of
the service/drug price, and the opposite, lower co-
payment rate for the higher price services/drugs.
There is no co-payment for health care services in
the following cases: (a) follow-up of the health
status of the insured by the physician of choice and
for emergency medical services on call; (b) users
who receive permanent social assistance, persons
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placed in an institution for social protection or in
another family, except for medicines prescribed at
the PHC level and for the treatment abroad; (c)
psychiatric patients placed in psychiatric hospitals
and persons with mental retardation without
parent's care; (d) insured who, during the calendar
year, have paid user charges for specialist-
consultative and hospital treatment (except for
medicines prescribed at the PHC level and for
treatment abroad) accumulating to over 70% of the
average income per month in the country in the
previous year; (e) additional exemptions, in
accordance with some special health care programs
with social dimensions and treatment of certain
debilitating, costly, and often life-threatening
diseases (rheumatic fever, progressive nervous and
muscle diseases, cerebral paralysis, multiple
sclerosis, cystic fibrosis, epilepsy, penfigus, lupus
erithematodes, infectious diseases - list of about 20
diseases, drug-addiction and alcoholism, up to 30
days, chronic dialysis, conditions after
transplantation of the organs, malignant diseases,
hemophilia and diabetes, hormones for growing-up
the children and compulsory immunization); (f)
prosthetic, orthopedic and other devices for
children up to the age of 18; (g) women in relation
to pregnancy and delivery; (h) infants, up to one
year of age; (i) blood donors who voluntary have
donated blood more than 10 times; and persons
exempted by some special regulations (war-
disabled persons or families of soldiers who were
killed in action).
User participation in health care expenses have
eliminated overuse of services, but have raised
fewer funds than expected, contributing less than
5% of the revenues of health care providers. They
also raise questions of equity.
There are also informal (under the table)
payments, which extent is difficult to assess. It is
believed that this practice is common for surgeons
to levy further, informal payments from their
patients.
Payment to the health care providers
According to the Law on Health Insurance [1],
health care organizations and the HIFM are obliged
to plan the necessary funds for providing health
care services and realization of the benefits to
health care to the insured coming from the
obligatory health insurance. Each year, the HIFM
prepares a plan and program for health services to
be financed from the obligatory health insurance.
Moreover it determines criteria, by the General Act,
for contracting with health care organizations and
for the ways of payment to the providers of health
care services.

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According to the Law in Health Insurance, there
are three basic methods of payment to the
providers for health services: (a) capitation; (b) fee-
for-service; and (c) programs for certain kinds of
health services. In addition to that, the HIFM
determines some other criteria for coverage of
emergency medical services for the entire
population, home visits by nurses (patronage) to
pregnant women and babies regardless of the status
of insurance, providing continuous health care (24
hours), etc. The Law does not make any difference
between public and private health care providers in
relation to the possibilities for contracting with the
HIFM in order to provide equal financial conditions
and incentives for efficient performance in
delivering health care for both types of providers.
The majority of doctors and other health care
professionals in the public health sector are paid a
salary on scales negotiated by the Union of Health
Care Workers and the Ministry of Health. Some of
the physicians in the private sector at PHC level,
starting from 1999, were paid based on the
principle of capitation. In 2007, after the performed
transformation of public health institutions and
privatization of chosen physician, the method of
capitation for doctors is applied for health services
payment at PHC level.
During the last ten years fully-trained physicians
received a monthly salary of between 12000 and
18000 MKD (200 to 300 Euro) (5). This situation
improved slightly by increasing the net salary of
doctors and other health workers in 2007 by 17.5%
and increasing the value of the points for calculating
the capitation for physicians at the PHC level [8].
Nevertheless, when you consider that the value of
the consumer basket for food and drinks for a four-
member family for April 2009, calculated by the
State Statistical Office upon the market prices, was
about 12.730,oo MKD, there is a clear incentive to
seek alternative sources of income.
Revenues and expenditures of the health
insurance fund
Obligatory health insurance is the main source for
health care revenues.The revenues of the HIFM are
used to fund the programs for which the Fund is
responsible and to finance the government's share
of the health insurance costs for those additionally
enrolled in the program, who are not Fund insurees
and the health care costs for them are covered by
the state budget. Direct contributions by employers
and workers for health insurance were 52.9% of the
total HIFM revenues in 2007 (table 2). In addition,
their contributions to pension and unemployment
schemes include components that are used for
health insurance for persons who are retired,
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unemployed, disabled veterans or recipients of
social (welfare) benefits. These amounts, which
were about 33.9% of the HIFM revenues, are paid by
the State Funds for Pension, Unemployment, and
other social programs. HIFM revenues from the
general budget in 2007 amounted to 5.21%. The
Ministry of Finance sets the budgets for the Ministry
of Health’s vertical programmes, and examines and
approves budgets for the HIFM.
Expenditures of the HIFM for contract health care
services in 2007 accounted for about 90.7% of the
total expenditures. Salary reimbursements for sick
leave and maternity leave compensations
accounted for another 6,7% (table 3). The structure
of the expenditures on health care services of the
HIFM in 2007 is presented in table 4. Outpatient
services (at the PHC level and outpatient specialist-
consultative health care services including
medicines from the HIFM List of medicines)
accounted for about 65.0% and hospital
care/services for 32.1%. The proportion of GDP
recorded as spent in the formal health care system
appears to be about 6,5% in 2008. But, in the
context of remarkable inflation figures vary and the
GDP figure also has to be treated with caution.
Nearly all health expenditure (more than 95%) is
reported by HIFM to be in the public sector but this
figure seems overestimated as some analysts point
out that out-of-pocket payments for health services
and medicines contribute about 25% of overall
health expenditures. Total revenue for the HIFM in
2007 totalled 17,491,257 MKD while total
expenditures equated to 16,425,001 MKD, leaving a
positive balance of 1,066,256 MKD [8].
Current trends in health care and provider
payment reform
In spite of a rapid growth in expenditure over the
last ten years and the accumulation of significant
debts by public health care institutions and the
HIFM, the health system does not appear to have
significantly improved access to basic health
services and remains inefficient and inequitable.
Resource distribution was concentrated in
secondary and tertiary care, particularly in the
capital city of Skopje, while access to basic services
in some rural parts of the country is still limited and
of poor quality.Available efficiency indicators of the
public health care institutions are below EU norms.
Prices paid for pharmaceuticals by the HIF in
Macedonia were significantly higher than prices
obtainable through international competitive
procurement. Health care reforms undertaken in
1990’s have proved unsustainable, and have in
practice largely been abandoned or revised. The
development and implementation of policies and
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Table 3. Expenditures of the Health Insurance Fund of Macedonia, 2006 and 2007 [8].

Source: Health Insurance Fund of the Republic of Macedonia (2008).

Table 4. Structure of the Health Care Services Expenditures of the Health Insurance Fund of Macedonia, 2006 and 2007 [8].

Source: Health Insurance Fund of the Republic of Macedonia (2008).

plans for reform have been hampered by weak
capacity in the state health sector agencies (the
Ministry of Health, the HIFM and the Republic
Institute for Health Protection.), and the lack of data
and information systems for surveillance,
monitoring and analysis. The result of this situation
is that Macedonia has been slower to undertake
health care reform than many EC countries [5,8,10].
Adoption and enforcing the new Health
Insurance Law and separation of the HIFM from the
Ministry of Health were key and the most successful
implemented reform processes suggested by the
international consultants of The World Bank. The
HIFM is now centralized, hospitals are in practice
subject to detailed Ministry of Health and HIFM
controls. Technical efficiency has improved as the
average length of stay in hospitals has decreased.
Public providers are in practice paid on the basis of
global budget contracts. PHC reform has increased
patient choice through patient enrolment and
capitation-based payment to physicians. The
capitation is calculated on the basis of numbers of

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ITALIAN JOURNAL
insured persons that have chosen a certain
physician as their own primary care physician, the
determined number of points for each category of
population group and the determined value of each
point. Additional incentive is provided for
physicians’ practices that are located in remote rural
areas. The invoicing for provided health services is
undertaken once per a month, that is 70% of the
calculated amount of capitation, whereas the
remaining 30% of calculated monthly amounts of
capitation is invoiced after each quarter, based on
the results presented in the quarterly reports in
accordance with the aims determined in the
contracts. The manner of payment for primary
dental care services is regulated by a special
rulebook, according to which the method of
capitation is used [8,10].
Public health institutions in 2007 were paid on
the basis of public bid and the interest shown by
health institutions responsible for providing health
care at all levels, and signed contracts for the first
time of all public health institutions (total number
of 115 contracts) with the HIFM on the basis of
appropriate legal acts. The relations between the
HIFM and the health institution responsible for
providing health care services to insured persons
have been regulated in these contracts, as well as
the manner of payment, responsibilities and rights
of agreed parties and other issues related to the
mutual relationships between the agreed parties.
Private health institutions delivering primary and
specialist-consultative health care are paid on the
basis of signed contracts with the HIFM. At the
beginning of 2007, the HIFM signed a total of 2,203
contracts with private health institutions
responsible for primary and specialist-consultative
health care (1,979 for PHC and 224 for specialist-
consultative health care). In 2007, 2,654 physicians
had active facsimiles as chosen physicians that have
been working with the HIFM: 1,206 in general
medicine, 78 in occupational medicine, 167 in small
and preschool children health care, 61 in school
medicine, 132 in health care of women over 15
years of age, and 1,010 in dentistry [8].
The second World Bank financed a project for
continuation of the health care reforms in
Macedonia (The World Bank, 2004) which was
initiated in 2003 and approved in 2004 with the
following specific objectives: 1) to upgrade Ministry
of Health and HIFM capacity to formulate and
effectively implement health policies, health
insurance, financial management and contracting of
providers; and 2) to develop and implement an
efficient scheme for restructuring of hospital
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JPH - Year 7, Volume 6, Number 1, 2009
OF PUBLIC HEALTH
services with emphasis on developing day-care
services and shifting to primary care [10]. The
expected improvement in primary care and
increased access to essential health services,
especially for the poor and uninsured, would help
bring further reductions in infant mortality and
improvement in other health status indicators,
which in turn would help the country meet its
Millennium Development Goals. Health financing
and reform of the payment to health care providers
are of high importance within the ongoing health
care reform in Macedonia. It is expected that the
new introduced methods of payments for all
doctors in 2007 at the PHC level (capitation) and in
2009 (January 1st) at the hospital sector (global
budgeting, DRGs), as well as the tendency toward
the universal health insurance coverage for the
entire population, will lead to improved equity,
increased efficiency and quality of health care in
hospitals and higher efficacy of the overall health
care system.
References
1) The State. Health Insurance Law. Official Gazette of the
Republic of Macedonia [in Macedonian]. Skopje, 2000;25:1455-
65.
2) Donev D. Health Insurance System in the Republic of
Macedonia. Croat Med J 1999;40(2):175-80.
3) Ivanovska L, Ljuma I. Health Sector Reform in the Republic of
Macedonia. Croat Med J 1999;40(2):181-9.
4) Donev D. Specificities of the Current Health Insurance System
in the Republic of Macedonia. In: Bjegovic V, Donev D. (Eds.).
Health Systems and Their Evidence Based Development. A
Handbook for Teachers, Researches and Health Professionals.
Hans Jacobs, Lage, 2004:343-62.
5) Donev D. Health Insurance System and Financing of Health
Care in the Republic of Macedonia. In Laaser U, Radermacher
Ralf (Eds.). Financing Health Care – A Dialogue between South
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6) Misovski J. Health Insurance. Comments to the Health
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04042716350 [Accessed June 10, 2004].
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